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Recently, my friend in China told me she bought an iPhone 15 for half the retail price and has been happily using it for months with no issues. When I asked how she managed that, she said she found it on an app called Paipai Selection, a marketplace for certified pre-owned electronics. Her reasoning was straightforward: she plans to upgrade her phone every two years, so why pay full price when a 95%-new device costs half as much and even comes with a warranty? That story made me want to book a flight to Asia just to upgrade my own device.

As a finance professional, I discovered that the company behind that app, ATRenew (RERE), is actually listed here in the U.S. It’s one of the leading circular economy platforms for consumer electronics in Asia, and its first quarter 2025 results were quite impressive. Total net revenues climbed 27.5% year over year to RMB 4,653.5 million (US $641.3 million), beating the company’s high end of guidance. Sales of refurbished products at the heart of its business jumped 28.8% to RMB 4,263.7 million (US $587.6 million), while service revenues driven by multi category recycling and marketplace fees rose 14.2% to RMB 389.8 million (US $53.7 million) according to the earnings report. Those strong results have been fueled in part by generous national subsidies for smartphone trade in programs, reflecting the government’s push to promote and subsidize the circular economy. Right now, it is reported that the government is directly subsidizing RMB 500 per device as trade incentives. The company reported the average recycling price is around RMB 1500, so the subsidy is almost one third. As long as the subsidy continues, like the EV car incentives here in the U.S., ATRenew’s topline growth will remain strong. 

On the cost side, ATRenew improved gross margins because merchandise costs, although up 22.7% to RMB 3,615.9 million, grew more slowly than sales, lifting the overall gross profit margin by about three percentage points compared with the prior year. Operating expenses rose 23.7% to RMB 4,581.0 million as the company scaled its logistics network and inspection centers. Even so, ATRenew swung from an operating loss in Q1 2024 to operating income of RMB 72.7 million (US $10.0 million), and non-GAAP operating profit surged 39.5% to RMB 111.9 million with all double digit growth.

I always pay close attention to cash on the balance sheet, and ATRenew’s remains robust. As of March 31, 2025, cash and equivalents together with restricted cash, short term investments, and receivables totaled RMB 2,782.3 million. The company also expanded its network of AHS stores by a net 458 locations year over year, improving accessibility and turnaround times for trade ins.

Beyond the numbers, the broader economic backdrop favors ATRenew’s model. With China’s economy slowing, consumers are more focused on cost savings, and the government has made the circular economy a policy priority by offering subsidies and incentives across the electronics trade in and recycling ecosystem. This combination of consumer frugality and state backed support should keep driving demand for preowned devices and related services.

Looking ahead, ATRenew has guided Q2 2025 revenues to RMB 4,710 to 4,810 million, implying 24.7% to 27.4% growth year over year. That’s an ambitious outlook, since Q1 is traditionally slow for Chinese companies due to the ten-day shutdown over Chinese New Year. Yet for ATRenew, the holiday season may actually boost trade ins much like how gift purchases spike before Christmas.

Right now, the company is trading at roughly one times forward sales, and with profitability back on track, the stock appears attractively valued relative to peers in China’s circular economy and internet sectors. With government backing, a consumer base eager to save money, and clear operational leverage, ATRenew seems well positioned to capitalize on the growing preowned electronics market.

One thing that confused me is that the stock’s performance doesn’t seem to reflect all this double digit topline growth. The five-day price performance is up 5.02% and over the past thirty days it is down 16.61%, leaving year-to-date performance at –12.85%. My guess is that ATRenew remains relatively unknown here in the U.S., and there isn’t really a true analog in the American market—perhaps eBay comes closest. That lack of domestic familiarity may be weighing on investor sentiment despite the company’s strong fundamentals.

According to one of its public filings, eBay connects 134 million active buyers to more than $18.8 billion of gross merchandise volume each quarter, all without a single branded storefront in North America. As of late May 2025, eBay’s market cap is around $33.14 billion. By comparison, ATRenew’s market cap is roughly $0.575 billion (US $575.1 million). That means eBay is nearly 58 times larger by market value than ATRenew today. If ATRenew ever breaks through in the U.S. or other countries and builds even a fraction of the consumer-facing network that eBay has built digitally, the contrasts in scale and profitability today shows just how big the opportunity could be. 

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